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China’s debt clamp down stokes risk of first local government credit defaults

The risk of a wave of defaults among China’s heavily indebted local government financing vehicles (LGFVs) for the first time is causing jitters in financial markets after Beijing signalled early this year there would be no bailouts.The central government set a modest economic growth target of above 6 per cent for 2021, but it highlighted debt reduction as one of five major tasks this year as it seeks to cut excess housing inventory and reduce overcapacity in certain sectors.Beijing’s renewed…

Read the original article at South China Morning Post

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